The wealthiest Americans and business employers have had the upper hand for decades. They’ve reaped more and more gains from the economy in the last four decades. They pay less tax than ordinary Joes or Josephines or no tax when they take loans out with their shares as collateral to avoid paying a much higher tax if they had sold their shares.
ProPublica revealed that Tesla’s Elon Musk pledged 92m shares of Tesla stock, now worth more than $1,000 a share, as collateral for personal loans. The Guardian
Who on minimum wage can afford to buy shares and invest in property? Approximately 42.5 million or 13.4% of Americans live below the poverty line waiting for the game's rules to change. Over a fifth of the population of Mississippi live in poverty.
Life must be a game for billionaires playing with rocket ships, cars, and distribution services, yet we keep giving them our time and money for a minimum wage and poor treatment. Working hard gets you nowhere but treading water.
We’ll go back to The Great Compression of the 1930s (coined by economist Paul Krugman). We learn that strengthened labor unions, a federal minimum wage, Social Security and unemployment insurance, and increased taxes on the wealthy and corporations created more equality — and held back inequality for roughly 40 years.
The above policies meant the top 1% made a lot less income. However, their income started climbing again in the late 70s; this change is known as The Great Divergence. Also known as the time when the wealthy began growing richer again.
What changed?
Ordinary folks continued to earn most of their income through wages and salaries. But rich people grew wealthier through investments and business between 1996 and 2006. From 2000 to 2016, they saved.
In 2005, Federal Reserve governor and future chief Ben Bernanke highlighted a global savings glut. He debated that the more than 6 percent of national income that made up the US account deficit was not a result of careless wastefulness but the frugalness of the rest of the world.
Lending money to governments and households began.
In the 25 years leading up to the 2008–09 financial crisis, they calculate, the top 1 percent financed almost a third of the rise in household debt owed by the bottom 90 percent.
In October 2021, The Guardian reported, “The Billionaires Income Tax would ensure billionaires pay tax every year, just like working Americans,” said Democratic Senator Ron Wyden of Oregon, the Senate finance committee chairman. The latter wrote the new billionaire tax proposal.
“No working person in America thinks it’s right that they pay their taxes and billionaires don’t.” Democratic Senator Ron Wyden
The Biden administration wants to tax billionaires’ unrealized gains. As you might imagine, there’s a lot of resistance to this approach. President’s Budget Rewards Work, Not Wealth with New Billionaire Minimum Income Tax.
According to the White House, billionaires in America pay income tax at a rate that’s just half that of the average worker. Some billionaires pay no tax at all. wbur
Working-class Americans will have to continue paying their taxes and wait for those with a net worth of $100 million or more to pay their fair share of tax.
In the meantime, give a thought to strengthened labor unions, a federal minimum wage, Social Security and unemployment insurance, and increased taxes on the wealthy and corporations which created more equality for forty years. And also made sure the top 1% earned less.